Behind MTN share offer

The back-and forth negotiation escalated to the point of deportation of three MTN Uganda expatriates – MTN CEO Wim Vanhelleputte,  then-General Manager for sales and Distribution, Annie Tabura, and then Chief Marketing Officer, Olivier Prentout –  in February 2019, with the Uganda government accusing the trio of alleged gross crime including threatening national security.

However, Vanhelleputte, was allowed to return three months later on the intervention of President Museveni.

“It is right that MTN Uganda was compelled to list as a pre-requisite for their recent licence renewal,” one of the sources that spoke to Independent said.  “If otherwise, they would keep 100% of their shares, it makes sense. MTN Uganda is a sound business, and boards don’t like to deal with people who have invested Shs100, 000 and make so much noise on social media etc. No one wants to deal with that.”

The sources said if it was ‘forced listing, MTN Uganda would not list on USE because a public listed company is a headache to run.

But they are quick to point out that listing a company on stock market helps burnish the business’s credentials in a sense that it helps to essentially gain more credibility among the public as the value of the company is well known.

MTN Uganda started operations in 1998 and has since recorded a surge in subscriber base to more than 15million. In 2009, the company pioneered mobile money business alongside its telecommunications business until 2021 when, as a consequence of the introduction of the National Payment Systems Act 2020, MTN was required to transfer the mobile money business to a wholly owned subsidiary, MTN Mobile Money Uganda Limited.

Following the completion of the licensing and structuring process prescribed by the National Payment Systems Act 2020, the mobile money business with effect from 19 June 2021 started operated by MTN Mobile Money Uganda Limited.

Currently, MTN has a presence in all 134 districts countrywide and has evolved from a telecommunications company providing value added services to a provider of an innovative range of products and services including voice, data, digital and mobile financial services delivered through a network of more than 145 407 mobile money agents, service stores and 13 main distributors.

MTN converted to a public company limited by shares (under registration number P.498) by a resolution of the members, dated 14 November 2002, with the conversion process being formally completed on 17 December 2003.

MTN is a subsidiary of the MTN Group, which beneficially owns 96.015% of the issued shares in MTN through MTN International, an investment holding company incorporated in Mauritius.

MTN Group operates in 21 countries in Africa and the Middle East and has 277 million subscribers as at 30 June 2021.

Listed on the Johannesburg Stock Exchange, MTN Group has a market capitalisation of more than US$16.6 billion.

More investments ahead

Vanhelleputte says the telco plans to invest more than US$300million mainly towards expansion in the network to grow its business.

He said one of the major conditions for National Telecom Operator (NTO) Licence issuance is for MTN to achieve 90% geographic coverage within the first five years. Currently, the company stands at geographic coverage of 70%.

He said the company’s opportunities for growth in the near future are mainly two: mobile money and other fintechs and mobile data.

“We still have a low penetration of data. We only have only 30% of our customers who use mobile data regularly and therefore need to invest more in our network, our capacity and spectrum so that the internet speeds are higher,” he said.

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